What would you do if you did a Google search for your own company name, and the top listing was an advertisement from a competitor pretending to be you? Today, we’ll look at one such case with the help of intellectual property attorney and past Search Engine Strategies conference speaker, Mark J. Rosenberg.

Rosenberg shares his insights about a business case that involves alleged trademark infringement via a client’s competitor using Google AdWords, and expert legal information on how marketers should protect theirs’ and their clients’ trademarks, and fairly use the trademarks of their competitors in search advertising.

Important note: The following is for informational purposes only, and should not to be treated as legal advice!

The Vendor’s Story

I originally interviewed Ingrid Kosar, owner of the website, Thermal Bags by Ingrid, who was dealing with a an ex-employee who was lifting her own business name to show up above her in Google’s search results with his AdWords keyword placement.

On October 26, 2010, when you Googled [thermal bags by Ingrid”, a competitor’s website popped up as a Sponsored Link, above her organic listings. The screenshot above (taken on same day) shows that the competitor was using her exact company name in the title and description of the ad.

Kosar said she had incorporated her business back in 1983, and had her website with her company name around for at least 15 years. However, Kosar had never actually trademarked her business name.

She assumed that since her business name had been around for so long, she would be protected by what is called a “common law trademark.” Common law trademarks are treated as the right of someone to use a trademark without having to file with the U.S. Patent and Trademark office, as long as they are actively using the mark.

Kosar had retained legal counsel against this ex-employee, but found herself in for a frustrating ordeal.

“We had an attorney threaten him before, but he only keeps a P.O. Box; and he just got more slippery and harder to find,” she told me at the time.

Kosar strongly believed that her ex-employee had committed trademark infringement.

“What he is doing is clearly misrepresenting my company,” she said. “The way it is listed in Google AdWords is directly misrepresenting me and my product line. We do not sell to this guy, and he does not carry any of our products. (For all I know), he may be selling a counterfeit imitation of my product.”

So was this a case of fair competitor use? Or was there any deceptive practices casing real consumer confusion? And remember, without a federally registered trademark, do you even have a case to begin with?

I asked Rosenberg the following questions about Kosar’s case:

Does featuring a competitor’s company name in both the title and description of a sponsored ad (on Google Adwords) constitute trademark infringement?

Does Google have any responsibility to remove the competitor listing?

Does the fact that the original business has not officially registered the trademark name affect their allegation of trademark infringement? Or does their having a “common law trademark” help them, and in what way?

What would be the proper way of pursuing a trademark infringement claim with Google, on its AdWords Program?

Here’s some valuable legal information that every search marketer, and especially those advertising using Google AdWords, should pay attention to:

Tip 1: Your Competitors are Allowed to Feature Your Own Trademarks in Their Ads

That’s right, even if it’s as blatant as featuring your own trademark in the title and description of an ad. Rosenberg explained that under the legal doctrine of nominative fair use, a competitor is permitted to use another’s trademark so long as it is using the trademark to identify another’s goods or services, and the goods or services can’t be readily indentified without using the trademark.

“For example, online marketers referring to an iPod do not need to refer to it as the portable music player distributed by the company named after a fruit that is harvested in the fall. Instead, the marketer can refer to an iPod as an iPod.” Rosenberg said.

However, there are limits to this doctrine. Rosenberg explains that the marketer must have a legitimate reason to be using the trademark. The marketer’s website must sell or provide services related to the genuine trademarked goods or services, make legitimate comparisons to the goods or services, or otherwise have a good faith reason to use the trademark.

“Using the mark as an AdWords advertisement (solely) to drive traffic to the competitor’s website is not a good faith reason if there is no legitimate use of the trademark on the website,” he said.

According to Rosenberg, the unauthorized use of the Thermal Bags by Ingrid mark falls into the latter category. That’s because Thermal Bags by Ingrid aren’t offered on the competitor’s website. In fact, it doesn’t appear that this trademark appears on the competitor’s website at all.

“Here, the competitor’s use of the Thermal Bags by Ingrid falls outside of the bounds of nominative fair use and as a result, constitutes federal and common law unfair competition,” Rosenberg said.

Tip 3: Register Your Trademark!

Despite these violations, the competitor still didn’t actually commit any trademark infringement. That’s because Kosar never actually registered her trademark!

While federal registration isn’t required to use a trademark, a federal registration with the U.S. Patent and Trademark Office affords you certain protections, including “the exclusive right to use the mark on or in connection with the goods or services set forth in the registration.”

Rosenberg said that the lack of a trademark registration places an additional burden on the business.

“In order to possess trademark rights in an unregistered mark, (i.e. a ‘common law trademark’) the owner of the trademark must prove that the trademark has acquired secondary meaning,” he said. “This means that the relevant consuming public associates the trademark with a single source.”

So how do you achieve that, exactly? In most cases, establishing secondary meaning requires years of use of the trademark, significant sales of goods or services bearing the trademark, and significant advertising of the trademarked goods and services.

“In addition, common law trademark rights only extend to the areas of the country where secondary meaning has been established,” Rosenberg said. “So, if a business only markets and sells its trademarked products in the Northeast, it is unlikely that it possesses trademark rights in the Southwest.”

So even if you’re able to establish secondary meaning in one jurisdiction, you may not where your competitor is using your trademark!

Tip 4: Alert Google!

Even if you don’t have a registered trademark, you can still be treated as a trademark owner. So trademark owners who find any unauthorized use in AdWords should file an AdWords trademark complaint with Google.

“Once Google is put on notice of the infringing listing, then they are is legally obligated to remove this listing (in a timely manner). If Google fails to do so, it runs the risk of being deemed a contributory infringer.” Rosenberg said. “I know Google disagrees with this, but I believe that the law is clear on this issue.

“For example, if a television network is put on notice that it is airing an infringing advertisement and fails to stop airing it, the network can be deemed a contributory infringer. If a trademark infringement is taking place in the title and description of a sponsored ad appearing on Google, Google should not be treated any differently than a TV network.”

Tip 5: Monitor Your Trademarks!

Google Alerts is perhaps the best free means on the web today for monitoring your trademarks. Simply enter your trademark terms, and you can have it set up to receive automatic notices for wherever and whenever those trademarks are being featured by others online.

The Aftermath

Since I first covered this case, Kosar appears to have been successful in having her ex-employee’s listing removed from Google for a keyword search of her trademark name; and her own website now shows up in one of the top three search spots.

Join us for SES London 2011, the Leading Search & Social Marketing Event, taking place February 21-25! The conference offers sessions on topics including search engine optimization (SEO), keyword analysis, link building, local, mobile, video, analytics, social media, and more. Register now.

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